South Korea faces rising illegal private lending and voice phishing scams

Illegal private lending practices in South Korea are becoming increasingly sophisticated, involving threats of social defamation and extortion. Victims have reported being threatened with false accusations of sexual crimes and having their personal contacts contacted to demand debt repayment. These lenders often use malicious applications to access contact lists and impose interest rates far exceeding the legal limit of 20% per annum.

In a related development regarding financial fraud, the Incheon District Court acquitted a man in his 40s charged with delivering voice phishing proceeds. The court ruled that the defendant likely mistook the instructions from criminals as a legitimate 'work loan' process intended to help him secure funds for his spouse's surgery. The court noted that the defendant lacked clear intent to participate in the criminal organization, as he continued to seek help from the organization to resolve issues with the Financial Supervisory Service after his accounts were frozen.

Despite government efforts, including a nationwide special crackdown by the National Investigation Headquarters scheduled through next October, illegal lenders continue to evolve their methods, such as requiring victims to issue debit cards in their own names to facilitate illegal transactions.